Casey bill aims to help middle class, business

U.S. Sen. Bob Casey, D-Pa., unveiled legislation Wednesday aimed toward helping the middle class and small businesses, which he hopes will be included in any agreement aimed at avoiding the so-called fiscal cliff.

Casey said any deal to avoid the fiscal cliff needs to help middle-income families and small businesses. Casey said consumer spending helps strengthen the economy and the majority of that spending is done by families who make less than $150,000 a year.

"We have to make sure we don't abandon ... strategies that will create jobs," he said during a conference call with reporters Wednesday. "We need to continue to grow our economy."

Casey's legislation calls for the extension of the payroll tax cut for one year and also would give employers tax credits for hiring employees. The bill, the Middle Class and Small Business Tax Cut Act of 2012, calls for the extension of the 2 percent cut in payroll tax next year for about 160 million American workers.

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In Delaware County, the median annual wage is estimated to be about $34,808, according to figures compiled by the U.S. Congress Joint Economic Committee, which Casey chairs. If the payroll tax cut is extended another year, a household with one earner would receive an additional $696 for the year; a two-earner household would receive an additional $1,392 for the year.

The bill also would provide a 10 percent tax credit for any small business on the amount their payroll increases due to hiring additional workers and increasing pay.

This bill could help about 10,901 small businesses, meaning businesses with less than 500 employees, in Delaware County, according to 2009 estimates compiled by the Joint Economic Committee's staff.

The bill also potentially could help about 1,969 large businesses, meaning businesses with more than 500 employees, in Delaware County. While the bill could help these larger businesses, there is a "$500,000 cap on the tax credit which makes it more attractive to small businesses," Casey spokesman John Rizzo said.

Casey added that it's important to reduce spending but lawmakers need to evaluate the best way to do that.

"We need to make smart decisions not ideological decisions," he said.

Casey said his bill would transfer funds from the General Fund to the Social Security Trust fund to ensure that Social Security is not affected by the temporary payroll tax relief. Casey will be chairing a Joint Economic Committee hearing about the fiscal cliff today.